Don’t Build Your Future on For-Profit College Degrees

A new report shows there is little, if any, added value to obtain a for-profit college degree. Workers looking to advance their careers through education might be better off sticking to non-profit public higher education outlets.

That’s the finding of a working paper from the National Center for Analysis of Longitudinal Data in Education Research. (Fortunately it’s blessed with the acronym CALDER.) The center, a compendium of universities, tracks student learning on an annual basis.

The researchers from the University of Missouri and RAND sent almost 9,000 fictitious resumes of young job applicants who recently completed their schooling to online job postings in six occupational categories and tracked employer callback rates. They found no evidence that employers prefer applicants with resumes listing a for-profit college relative to those whose resumes list either a community college or no college at all.

As the Wall Street Journal reports, “That may be unwelcome news for operators of for-profit colleges, which generally charge higher tuition than similar programs at community colleges do. For-profit schools are already under scrutiny, given their dramatic enrollment growth over the past decade, and the high debt loads their graduates carry.”

The report targets resumes that list for-profit and public-community-colleges because, based on CALDER’s research, “for-profit colleges award a sizable share – roughly one third – of sub-baccalaureate certificates and degrees in the United States.”

Bluntly, the report states, “Our experiment does not reveal any evidence to suggest that resumes listing for-profit colleges are more likely to garner interest from employers relative to resumes that list public community.” It adds, “In fact, while not statistically significant, our point estimates indicate that applicants who attend for-profit colleges receive less interest from employers than do applicants who attend public community colleges.

“This finding holds when we pool across educational attainment levels as well as when we allow the for-profit effect to vary by attainment level. We also find little evidence of a benefit to listing a for-profit college relative to no college at all – our point estimates for this comparison are close to zero and inconsistent in sign. The estimated effects of listing a public community college relative to no college are also statistically insignificant.”

This about sums up what a for-profit degree means to your career advancement: the research indicates “that the labor market payoff to attending a for-profit college may be limited, especially in comparison to the much-cheaper community college alternative.”

The Wall Street Journal article observes, “The authors do note a caveat to their study: They only tracked employers’ initial responses to applications, and differences that would only come out in, say, late-round interviews were not accounted for here. However, they say, other research has found limited labor-market benefits from for-profit college education.”

Another caveat worth noting is the types of jobs applied for as part of the research. The authors note, “One practical issue was that job advertisements were more abundant in some fields than others. Openings for which our applicants were reasonably qualified were more common in administrative assisting, customer service, medical billing/office and sales. The number of suitable advertisements in information technology and medical assisting was lower.”

That latter point demonstrates a potential argument against for-profit colleges as well. They may be training students for positions not abundant enough to justify a higher cost of education. That fact is compelling federal regulators to explore the issue of post-graduation employment vs. loans secured for payment. The lucrative source of income (guaranteed student loans) could dry up for the for-profit colleges if it is determined an insufficient number of students are finding work in the field they paid high prices to study.

Master the art of closing deals and making placements. Take our Recruiter Certification Program today. We're SHRM certified. Learn at your own pace during this 12-week program. Access over 20 courses. Great for those who want to break into recruiting, or recruiters who want to further their career.

Keith Griffin is an award-winning business writer and editor with more than 30 years experience as a journalist. His work has been published in The Boston Globe, Medical Economist, Good Housekeeping, About.com, the Hartford Courant, CT Law Tribune and numerous other regional publications. Google+ Profile